BHIMRAJ MADANLAL Vs. STATE OF BIHAR

JUDGEMENT

(1.) SHOULD the "information which has come into his possession", as envisaged by section 18 (1) of the Bihar Sales Tax Act, 1959, for purposes of reassessment, necessarily spring from a source external to the original record ? This is the significant question which has necessitated this reference to the Full Bench. Equally at issue if the correctness of the view of the Division Bench in Civil Writ Jurisdiction Case No. 1400 of 1973 (Satya Narainji Mills v. State of Bihar) decided on 13th August, 1976.

(2.) SINCE we propose to answer the aforesaid pristinely legal questions only, it seems unnecessary to delve deeply into the facts. It suffices to mention that the petitioner-firm Messrs. Bhimraj Madan Lal is a registered dealer under the Bihar Sales Tax Act, 1959 (hereinafter called "the Act"), and is inter alia engaged in the manufacture of various kinds of pulses. For this purpose, it purchases whole grains like arhar, khesari, masoor, etc. , from producers as well as registered dealers for sale of its products within the State as also outside the State through its agents as well as in the course of inter-State trade and commerce. The petitioner-firm's assessments for the years 1968-69, 1969-70 and 1970-71 were duly completed under the Act on 21st January, 1970, 16th July, 1970, and 7th December, 1972, respectively. However, on or about 14th February, 1973, the petitioner-firm was served with notices under section 18 (1) of the Act with respect to all the aforesaid three assessment years calling upon it to appear in the office of the Superintendent of Commercial Taxes with its books of account, etc. , for a fresh hearing. On its application, the petitioner-firm was separately furnished with the grounds for starting the reassessment proceedings - vide annexure 3 - wherein it was stated that the petitioner-firm had been allowed certain deductions in the original assessment orders which were not legal or permissible under section 7 (2) (b) of the Act and the proviso thereto.

(3.) AS before the Division Bench, so before us, learned counsel for the petitioner, Mr. Bharuka, contended that section 18 (1) of the Act visualises only such "information" which is extraneous or external to the original assessment proceedings and the same cannot possibly stem from the existing record itself. Primary reliance was placed on Commissioner of Income-tax, Gujarat v. A. Raman and Co. AIR 1968 SC 49 as also on the earlier observations in Maharaj Kumar Kamal Singh v. Commissioner of Income-tax, Bihar and Orissa AIR 1959 SC 257 and the subsequent case of Indian and Eastern Newspapers Society, New Delhi v. Commissioner of Income-tax, New Delhi AIR 1979 SC 1960.